How does monetary policy affect the exchange rate and the price and output levels of a country?
Expansionary monetary policy lowers interest rates, which increases demand for investment spending and consumption. Lower interest rates also weaken the exchange rate, which makes exports more attractive and imports less attractive. These factors cause aggregate demand to increase, resulting in an increase in the price level and output. Contractionary monetary policy raises interest rates, which decreases demand for investment spending and consumption. Higher interest rates strengthen the exchange rate, which makes exports less attractive and imports more attractive. These factors cause aggregate demand to decrease, resulting in a decrease in the price level and output.
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If real GDP per person in a country equals $20,000 and 40 percent of the population is employed, then average labor productivity equals:
A. $8,000. B. $20,000. C. $50,000. D. $40,000.
A musician was guaranteed by the government that no one else could replicate or sell his music CDs. This is an example of a:
A) brand. B) patent. C) copyright. D) trademark.
Price elasticity of demand can be written as percentage change in Q divided by percentage change in P.
Answer the following statement true (T) or false (F)
Regression analysis can best be described as
A) a statistical technique for estimating the best relationship between one variable and a set of other selected variables. B) a statistical technique for determining the true values of variables. C) a statistical technique for creating functional relationships among variables. D) None of the above